Consumer sentiment and spending wanes
CONSUMER sentiment weakened slightly in August as consumers reined in their spending plans and continue to report only limited gains in their personal finances from a healthy economy.
At current levels, the survey suggests sentiment is broadly positive but Irish consumers are still cautious because household spending power remains constrained, according to the KBC Bank/ESRI sentiment index.
The index fell to 102.9 in August, a relatively modest drop from the 17-month high of 105.1 recorded in July.
The underlying trend, as measured by the three-month moving average of the sentiment series, remains modestly positive, climbing to 104.3 last month from 103.5 previously.
KBC Bank chief economist Austin Hughes said the broad message of the August data is that consumers remain positive in relation to the prospects for the economy and the outlook for jobs.
"Last month's readings for these two elements of the survey were the strongest since June 2016 and suggest that the significant fears that surfaced in the wake of last year's UK referendum vote to leave the EU have gradually eased, even if they haven't entirely faded," he said.
The strength of key economic data in the past year, along with new job announcements, have been the key factors in the gradual upgrading of the economic outlook by consumers, he said.
The absence of a feared collapse in the UK economy may also have played some part in this re-assessment.